27 August 2020

In search of ‘sustainable development’; a community right or thinly veiled land grab? Property lawyer Mark McEvinney explores the Land Reform (Scotland) Act 2016: Community Right to Buy for Sustainable Development.

The final piece of the jigsaw of the Scottish Government’s plans on radical land reform on community rights to buy eventually fell into place with the coming into force earlier this year of the community right to buy for sustainable development.  The mouthful that is ‘The Right to Buy Land to Further Sustainable Development (Applications, Written Requests, Ballots and Compensation) (Scotland) Regulations 2020’ came into force on 26 April 2020. 

Building on the community right to buy land enacted in 2003 and the right to buy abandoned and neglected land in 2018, these regulations complete the holy trinity of community right-to-buy options envisaged by the Scottish Government originally and reiterated in the Land Commission’s report in 2019.

However, it’s not just the inelegant title of these regulations that’s likely to cause alarm among affected landowners and tenants alike. Some may fear that the sting in the tail of this final part of the troika of community rights is that they are not so much rights as compulsory purchase powers.

Provided a community body can establish that they have complied with the procedural requirements and met the sustainable development conditions set out in in s.56(2) of the Land Reform (Scotland) Act 2016 (“the Act”), applications to acquire land or a tenant’s interest in land (except if tenanted as a dwelling which is someone’s home) can proceed without any engagement from the affected proprietor/tenant. Moreover, a community body can nominate in their application a third-party purchaser who will actually acquire the interest.

The sustainable development conditions to be met are:

• that the transfer is likely to further the achievement of sustainable development in relation to the land;
• that the transfer is in the public interest;
• that the transfer is likely to result in significant benefit to the relevant community;
• that the transfer is the only or the most practicable way of achieving that significant benefit; and
• that not granting the transfer is likely to result in harm to that community.

Whilst at first blush this is a comprehensive list, they do seem fairly broad concepts and may appear (with the exception of the first) not necessarily specifically related to sustainable development at all and give little clue as to what ‘sustainable development’ the legislation is designed to facilitate.

Some help can be found further on at s.56(12), which seeks to highlight issues which may constitute the benefit or harm to the relevant community described in the conditions. Those issues are as specific as economic development, regeneration, public health, social wellbeing, and environmental wellbeing.

Beyond precipitating (in the writer’s mind at least) a fleeting thought of, ‘”but other than economic development, regeneration, public health, social wellbeing, and environmental wellbeing … what have the Romans done for us?”, those underlying purposes for a community being able to compel the purchase of land or acquisition of a tenant’s interest still seem very esoteric and capable of very broad deployment for the creative community activist or other interested parties who can mobilise under a community banner. Bear in mind that a community body applicant can nominate a third-party purchaser.

This is perhaps the most alarming aspect though; that the new right is empowered in the name of ‘sustainable development’ and yet that term, or even the broader concept, is not defined in the legislation and its meaning only very loosely elucidated beyond the conditions in s.56(2).

Going back to basics, ‘sustainable development’ is generally accepted as encompassing the Brundtland Commission’s definition, i.e. development which ‘meets the needs of the present without compromising the ability of future generations to meet their own needs’, further qualified by the UN General Assembly in 2005 as having to reconcile environmental, social and economic demands; the three pillars of sustainable development.

That’s a complex interaction of interests, principles, aims and outcomes, the general application of which is surely a difficult if not impossible balance to achieve in a single legislative context. However, it doesn’t seem that the drafters have made much, if any, attempt to tie down the overarching purpose in the Act, most probably because of its esoteric nature.

Nevertheless, these three pillars will already be familiar to those involved in development in Scotland as they navigate their way through the increasingly sustainability-focussed planning and environmental processes in the usual rough and tumble of construction, development and redevelopment. Indeed, that context begs the question: Does sustainable development really need a power of community purchase? Clearly the prevailing political judgment has been and remains that it does, if for no other reason than to allow to communities to nibble at the edges (or indeed at the very heart) of long-established land holdings. However, whilst that may be the political aim, there is nothing in the various provisions to limit the power to breaking up Scotland’s vast rural estates, which rightly or wrongly are often seen as the target of the political drive behind such land reform in Scotland. Even the modest landowner can end up on the receiving end of this power.

Curiously though, given the open playing field of any land which could be better put to ‘community’ purposes, there seems little evidence in the legislation of thought being given to who is funding community acquisitions and what safeguards there are against secondary or tertiary interests hijacking the process. Do we trust well-intentioned community groups and Scottish Ministers to detect hidden interests working the genuinely motivated from behind, or are we simply asking too much of them as de facto moral gatekeepers?

That doubt is arguably reflected at the sharp end of the right; the valuation processes. Valuation is by independent valuer appointed by the Scottish Ministers, with the price being the aggregate of market value, depreciation of other assets caused by the purchase (including division of land held) and an amount attributable to any disturbance to the seller which may arise in connection with the transfer of the land. So far so good, however, the valuer must take into account representations not only from the proprietor of the target land, but also from the community body making the application or their nominated third-party purchaser.

In addition, the Scottish Ministers, where requested by the community body or third-party purchaser, must treat as confidential any information or document relating to the financial aspects of the application. That seems to embed an alarming lack of transparency on who is funding such acquisitions and not only seizes to the secret inner-workings of the Scottish Ministers the landowner’s ability to assess the financial strength or otherwise of a bidder (and thereby the future viability of their proposed use), but also provides a ready cloak with which to obscure any background interests that would prefer to remain in the shadows. This could be an open door for the less scrupulous funder to lend to a doomed-to-fail community venture with the longer-term aim of a back-door land grab when their security is eventually called up on the community venture’s failure. As we all know, the road of good intentions is littered with the pitfalls of unintended consequences.

Furthermore, the valuation time frame and opportunity to make representations is short at only 8 weeks and the valuer is to act as an expert and not an arbiter. Whilst that may be intended to incentivise the valuer to act to accepted professional standards under pain of being sued, it appears to leave open the question of whether or not duties are owed and to who, given that the expert is appointed to value the land for the Scottish Ministers.

Moreover, the moratorium on dealings by the target landowner during the period in which the application is being considered neuters their ability to yield to community pressure and bring the land into any use sympathetic to the community interest at that late stage. However, arguably that is of course the whole thrust of the power; to bring the landowner to the table to engage realistically with community interests at an early stage under pain of what is effectively a community compulsory purchase.

To the writer, this new community purchase power seems to have potential at worst as a utilitarian playground for the devilish and at best, so open to the influence of the prevailing political landscape, as to obfuscate any certainty in its application. That sits ill at ease with the long-standing fundamental of certainty and security of proprietorship in Scots property law, which whilst never an absolute is nonetheless further weakened by the introduction of this new power.

Having said all of that, clearly no one is arguing that the Valhalla of sustainable development is not a desirable aim, but is this legislative route the best way of promoting that? The fact of the matter is that the existing community rights have been used relatively sparingly thus far and, arguably, have been something of a damp squib in terms of achieving the overarching political aim of community engagement. It remains to be seen if this right will see any greater degree of take up from community bodies, but it would appear at face value to have at least potential for greater use.

Time will tell if the great political vision of community empowerment in land use and ownership will take flight with this latest addition … but don’t hold your breath.

Contact

Mark McEvinney Senior Solicitor mme@bto.co.uk T. 0141 221 8012